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Landed costing adds costs incurred in getting the stock into store to the price paid for the stock and updates the average cost in the system

Note

Purchasing JIT items is a special case of landed cost

  1. The PO is for the JIT item
  2. The Landed cost is against the JIT item
  3. When the PO is received the JIT item explodes into the components that are being stocked (JIT items are by definition not stocked)
  4. The landed costs are allocated across the kit components (by qty in the kit of each item) as the stock is created by counting of the components.


A simple view of what is going on

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Note

to use Landed costing configurations are required

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Note

 If you do not update the estimate with actuals you will have a balance in the GL Control Account "Landed Cost Clearing Account"

Shipping Organisations may pay GST - to enter a 100% GST line on the journal - Choose TAX type of 100%

Puts entire amount entered to Tax Column

  • TAX ONLY:  Expense Account (no DR or CR)
  • CR : Trade Creditors
  • DR : GST Paid

From the Purchase Order from PO to Goods Receipt - open the estimate

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GL Account configuration to show invoices in landed cost Actuals list

Landed Cost Audit

Landed cost calculations are complex and it is important that the actual cost update reflects accurately the journaled amount.  Because the average cost of a SKU is to two decimal places (as required by COGS journals) there is commonly a rounding difference.

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